Govt moots half-yearly release mechanism soon for sugar

In another step towards dismantling of the release mechanism, the government will soon shift to a half-yearly system of allocating quotas to the sugar industry for open market sale.

The government recently shifted to a four-month release mechanism from the earlier quarterly system. Stressing decisions on decontrolling the sugar industry would be taken shortly, Food Minister K V Thomas on Thursday said the government would also take a decision on raising import duties on sugar from the current 10 per cent in the next 15 days.

“The recommendations of the Rangarajan Committee on sugar decontrol will be seriously looked into by the government. Some of those will be implemented,” he said at the 78th annual general meeting of the Indian Sugar Mills Association (Isma). He said the allocation of sugar for open market sale was being done for a four-month period, from the earlier practice of monthly quota and also announced “very soon it will be made six-monthly”.

The Committee, set up by the prime minister and headed by the chairman of PM’s Economic Advisory Council C Rangarajan, recently submitted its report. It has favoured doing away with the levy sugar obligation (under which industry sells ten per cent of produce to government at a dictated price for public distribution system), release mechanism and a revenue-sharing model for sugarcane price. Thomas categorically stated the government “does not want it (Rangarajan report) to have the fate of earlier reports”. The panel has suggested immediate removal of regulated mechanism through which the food ministry allocates sugar quota to mills for open market sale.

On removal of levy sugar, he said the food ministry was discussing the issue with the state governments and the finance ministry on how to implement the recommendation. Adding: “We will find some solution in a short span of time.” On the Rangarajan panel’s recommendations on the cane area reservation, minimum distance criteria between two mills and price of sugarcane, Thomas said these three issues would have to be discussed with states. “We have already started discussions with state governments. I think, we will be able to come to a certain conclusion after discussion.”